Intellectual Property - IP Box

Cyprus is a member of the World Intellectual Property Organization (WIPO) and also of other International Conventions and Treaties.

In May 2012, tax amendments have been voted, which are now more important for companies whose one of their main activities is Intellectual Property. The new Cyprus IP Box provides for the following:

80% of profits generated as royalties are exempted from corporate tax, the remaining 20% is subject to the normal corporate tax rate of 12.5%, thusthe effective tax rate for IP Rights derived profit is 2%.

The registered IP does not need to be Cyprus registered in order to benefit from the Cyprus IP Box.

Any expenditure of a capital nature for the acquisition or development of IP is claimed as a tax deduction in the year in which it was incurred and the immediate four following years on a straight-line.

The definition of Patent & Intellectual Property rights has been amended to correspond to the meaning of the local Patent Rights Law of 1998, the Intellectual Property Law of 1976 and the Law regarding Trademarks. The IP tax regime covers the following non-exhaustive list: